As a result of a decrease in the price of pizza rolls, consumers purchase more pizza rolls and buy fewer tacos. This is an illustration of: the income effect. consumer sovereignty. the substitution effect. diminishing marginal utility.

As a result of a decrease in the price of pizza rolls, consumers purchase more pizza rolls and buy fewer tacos. This is an illustration of: the income effect. consumer sovereignty. the substitution effect. diminishing marginal utility.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Concept explainers

Form Utility

The term utility in general refers to the satisfaction earned from usage of a particular product or service. Utility always plays an important role because it influences various important elements like demand & thereby the price of the good or service as well. Though utility is not easy to measure, various types of economic models can be used indirectly. There can be various types of utilities like economic utility, marginal utility, cardinal utility, form utility.

Question

As a result of a decrease in the price of pizza
rolls, consumers purchase more pizza rolls and
buy fewer tacos. This is an illustration of:
the income effect.
consumer sovereignty.
the substitution effect.
diminishing marginal utility.

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